The Department of Energy (DOE) along with the Landbank of the Philippines have inked a deal that allows the efficient use of funds that would support host communities, specifically those under the Energy Regulations 1-94 (ER 1-94) Program.

The ER 1-94 was made to ensure communities get a reasonable profit share from power plants that are operating in their area.

The DOE noted that there are numerous barangays, indigenous peoples (IPs), and communities in remote areas that have yet to establish the required trust accounts under the program.

“Through the ER 1-94 Program, energy generation companies contribute one centavo per kilowatt-hour of generated power to support the communities hosting their projects. This initiative not only strengthens local development but also ensures that these communities can readily access resources to drive social, economic, and environmental progress in their areas,” the DOE explained.

Energy Undersecretary Rowena Guevara said that creating a trust account is vital in accessing the funds under the program.

“Setting up a trust account is a crucial step for these host communities to access and utilize these funds. Without an operational trust account, these communities may miss out on valuable support for local projects that could enhance infrastructure, education, health, and livelihood opportunities,” she elaborated.

Guevarra added that, “With Landbank as our partner, assisting local leaders and community representatives in understanding the account setup process and requirements is essential to ensure that they can manage and use the funds effectively for sustainable development and social welfare.”

The memorandum of understanding (MOU), which was signed by Guevara and Landbank Senior Vice President Althon Ferolino, would ensure the bank’s commitment to waive service charges for accounts falling below the maintaining balance.

This feature would assure communities of equitable and accessible funds as they may face challenges in maintaining a minimum balance in their accounts.

Landbank is also instructed to disseminate information about this arrangement to its 607 branches and branch-lite across the country so that the benefit could be spread throughout.

This partnership would help address the concerns of beneficiaries, particularly in opening and maintaining deposit accounts to access the program.

“[We aim] to strengthen partnerships with government and private organizations, including LBP, to better serve the beneficiaries of ER 1-94, such as private distribution utilities (DUs), electric cooperatives (ECs), and host communities, most especially IPs and ICCs,” the DOE said.

Under the ER 1-94, Distribution Utilities (DUs), Electric Cooperatives (ECs) and local communities hosting generation projects can access the Development and Livelihood Fund (DLF), the Reforestation, Watershed Management, Health, and Environment Enhancement Fund (RWMHEEF), and the Electrification Fund (EF).

Local communities can receive 25 percent of the one centavo per kilowatt-hour of the generated power from each of the funds, while the remaining 50 percent goes to the EF.